Community College Facility Coalition (CCFC)
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May 08, 2020

Legislative and Budget Update from Sacramento, Under Quarantine

Work in Sacramento continues during the COVID-19 crisis, despite looking very different than in past years. Below is an update on the status of the budget and legislative processes, and CCFC’s advocacy efforts.

Legislative Update

The Legislature went into recess on March 20 after passing SB 89 and SB 117, which provided up to $1.1 billion in relief for California’s schools, hospitals, and local governments. Before going into recess, the Senate voted to allow possible remote voting. The Assembly had concerns with the constitutionality of this approach, and did not adopt the same flexibility.

During the recess, both houses conducted budget hearings to perform their role in accountability and oversight of the Administration, asking questions about how the relief funding has or will be spent. These hearings were conducted pursuant to social distancing requirements, and included remote participation options for members of the public.

The Assembly reconvened on May 4 with the plan of allowing each policy committee to hold only one hearing this spring. Committee chairs worked to edit their hearing agendas to address only the most significant statewide priorities, including bills addressing the COVID-19 response, housing and homelessness, disaster response, and existing laws set to sunset. These hearings are proceeding under tight social distancing and sanitation controls, with brief testimony provided primarily over the phone and in-person participation discouraged. Assembly bills that are not currently scheduled for one of the planned hearings are unlikely to move forward in 2020.

The Senate is tentatively reconvening on May 11, though they are still working out details on how the mechanics of their committee hearings and floor sessions will work.

There were a number of bills introduced in 2020, prior to California’s response to the COVID-19 outbreak, that could have affected community college facilities. Below is a brief description of a selection of bills. While these bills are unlikely to move forward in 2020, they may return as bill proposals in future years.

FY 20-21 Budget Update

The FY 20-21 budget process faces significant uncertainty. With the extension of income tax deadlines to July 15, 2020, the state will not have an accurate picture of revenues until at least August. On Thursday, May 7, the Department of Finance (DOF) issued a memo outlining the May Revision economic forecast. The memo anticipates a $53.4 billion deficit through the end of FY 20-21, down from the anticipated $5.6 billion surplus projected in the Governor’s January budget proposal. The memo indicated that unemployment will exceed its peak in the Great Recession, estimated at 18% in 2020. DOF warns that schools and community college districts could see funding reduced by $18.3 billion, per the state’s constitutional Proposition 98 guidelines.

The state entered this recession in a healthy fiscal position, with about $17.5 billion in state reserves. However, the vast magnitude of the economic drop-off means that these reserves will be insufficient to maintain state programs and services for an extended period of time. To date, the state government is estimated to receive approximately $20 billion in Federal relief funding, with the precise amount to be determined based on actual costs in responding to the public health crisis, and potential future Federal authorizations. State leaders are continuing to press the Federal government for additional support, as California is required to pass a balanced budget.

The timeline for adoption of this budget is as follows:

  • Mid-May (anticipated to be by May 14) – The Governor will release a May Revision budget proposal, likely based upon a “workload” budget approach.
  • June 15 – The deadline for the Legislature to pass a FY 20-21 budget to the Governor.
  • August – The Legislature and Governor will amend the budget based upon 2019 income tax revenues. This could include cuts to existing state programs.
  • Fall 2020 – The Legislature and Governor may adopt additional revisions to the budget, as needed.

In March, the Department of Finance directed state departments and agencies to prepare for a “workload” budget scenario. This would mean budgeting to maintain 2019-20 service levels for existing programs, with a possible COLA adjustment, and no expansion of services or creation of new programs. Policymakers are trying to mitigate cuts to public education, discussing tools such as deferrals.

CCFC is advocating to fund all new start and continuing projects approved by the Board of Governors in FY 20-21. In addition to being relevant to the education and success of our students, these projects would provide critical economic stimulus and job creation. CCFC has also joined with a broad coalition of community college organizations, led by the Chancellor’s Office, to communicate shared budget priorities, including that community colleges will continue to receive 10.9% of Proposition 98, and that the guarantee not be suspended, underfunded, or manipulated. The shared budget priorities request to fund all of the capital outlay projects approved by the Board of Governors, and creation of a “Quality Online Instruction and Maintenance/Sanitation” block grant.

CCFC will provide an update next week when the May Revision budget proposal is released by the Governor. The May Revision will give us a window into the Administration’s thinking, but the budget passed by the Legislature in June will likely serve as a placeholder until tax revenues come in later this summer.

Bills of Interest

The following bills were introduced in 2020. None are currently scheduled for a hearing at this time. It is unlikely they will meet the threshold for consideration in 2020, unless otherwise noted.

AB 2088 (O’Donnell)
Retires “Proposition 13”

AB 2088 retires the use of the number “13” for naming statewide ballot measures. CCFC supports this bill, due to the confusion that the number may cause for voters.

AB 2186 (Grayson)

The author has pulled this bill from consideration and it will not move forward in 2020.

AB 2186 eliminates the requirement for local agencies, including community colleges, to withhold a minimum of 5% of the contract price for retention. CCFC opposes this bill, as mandatory retention is an important tool used to protect public funds in the event of performance issues. Additionally, we are concerned that this bill would negatively impact a community college district’s ability to withhold additional retention amounts for substantially complex projects.

AB 2987 (Flora)
CUPCCAA Noticing

AB 2987 provides an option to noticing requirements for CUPCCAA projects. Current law requires local agencies, including community college districts, to provide notice of CUPCCAA formal bid projects over $200,000 in a newspaper of general circulation at least 14 days before the date of bid opening. This bill would allow a local agency to publish this notice inviting formal bids electronically on its website at least 14 days before bid opening, in lieu of the newspaper notice requirement. If the agency chooses this option, it is still required to notify construction trade journals at least 15 days in advance of the bid opening. CCFC supports this bill, which could serve as a pilot project for possibly expanding the option beyond CUPCCAA projects in the future. 

AB 3333 (O’Donnell)

Assembly Member O’Donnell pulled this bill from consideration and it will not move forward in 2020.

Assembly Member O’Donnell introduced AB 3333, which states the intent of the Legislature to establish a “transparent and coordinated process” for the allocation of community college capital outlay bond funds. The intent was to ensure a process with clear expectations, allowing community colleges to better plan their project proposals.

Housing Legislation

Before the COVID-19 crisis hit, CCFC was routinely engaging in detailed conversations with a variety of stakeholders regarding affordable student and workforce housing. The discussions explored options for reducing costs associated with constructing and operating housing facilities, as well as funding opportunities for planning and construction of such projects. CCFC worked with entities such as the Chancellor’s Office, members and staff of the Legislature, the Community College League of California, the California School Finance Authority, and representatives for non-profit housing developers. Below is a selection of bills that were introduced to address community college housing issues. None are currently schedule for a hearing at this time, and it is unlikely they will move forward in 2020 unless otherwise noted.

AB 2353 (McCarty)
Affordable Student Housing Planning Grants

Assembly Member McCarty pulled this bill from consideration and it will not move forward in 2020.

AB 2353 would create a new competitive grant program administered by the California School Finance Authority in the Treasurer’s Office. The grants would be available for planning purposes, to help colleges determine if they can offer affordable student rental housing. CSFA would also be authorized to provide technical assistance. Authorized uses for the grant dollars would include feasibility studies, engineering studies, environmental impact studies, legal services, architectural plans, and more. CCFC worked closely with the author’s office on the development of this bill.

AB 3207 (Gipson)
Deferred Maintenance for Student Housing

AB 3207 authorizes the use of deferred maintenance funding for student housing. CCFC provided feedback that these funds are already stretched thin between scheduled maintenance and instructional materials, and that the amount of funding fluctuates annually.

SB 1355 (Durazo)
Joint Occupancy

SB 1355 revises the joint occupancy provisions for the use of community college property and buildings, with the intention of facilitating private development and operation of on-campus affordable housing. The bill is sponsored by Los Angeles Community College District. It proposes the following changes if the joint occupancy agreement is for affordable housing for students and/or employees of the community college district:

  • Waives the prohibition on a private entity charging the CCD rental fees in a joint occupancy agreement.
  • Allows a CCD to enter into a lease with a private person or firm for joint occupancy of CCD real property or buildings.
  • Expands options for lease terms from a maximum of 5 years to 66 years.
  • Permits a CCD to lease its land or buildings at less than fair rental value.